This invention relates to automated trading systems, and, more particularly, to hand-held systems for automated trade recordation and submission.
Commodity futures exchanges, by law, are required to execute trades for customer accounts and trades for brokers' and traders' (a broker trades for customers and in some cases for his/her personal account and a trader trades only for his/her personal account) personal accounts through open outcry in trading areas, rings or pits. Immediately after trade execution the details of trades are manually recorded on brokers' trading cards and/or order tickets and the time of trade execution is also manually recorded to the nearest minute. As soon as practicable, the trade information is manually edited, validated and the trade is allocated to appropriate accounts at one or more clearing members (relatively large firms that clear and margin trades for brokers and traders and their customers) and subsequently submitted to the commodity exchange for timely trade checking, trade matching (matching of the buy transaction against the sell) and overnight clearing and margining of positions. The trade submission time between the time of trade execution and submission to the exchange can range anywhere from 15 minutes to several hours.
Virtually all of the commodities exchanges have developed sophisticated systems to permit the traders and clearing members to submit the trades to the exchange through automated systems, once all of the manual processes are completed. Clearing members can submit trades through batch and real-time computer-to-computer communications lines which connect their own back office computers to the exchanges and brokers and clearing members can also submit trades through on-line CRT terminals directly connected to the exchanges' computers. The on-line terminal network also can be used, in many cases, to retrieve and correct erroneously entered trade data.
While exchanges have successfully automated the trade entry, matching and clearing processes, a void in automation exists within the trading rings and pits thereby requiring the inefficient manual trade recordation, audit trail timing, trade data transcription and the relatively large delays caused by these processes prior to trade submission, checking, matching and clearing. These delays require more manual work on the part of the traders, brokers, clearing members and their clerks in checking and correcting trades manually as a result of the slowness of trade entry. In addition, all of the parties to a trade are somewhat exposed in the market the longer that trade submission and matching is delayed.
Consequently, there is a need to automate the trade recordation and audit trail timing of trades much earlier in the entire trading process and eliminate constraints and inefficiencies in this process such as: (1) the relatively long time that may elapse between trade execution and submission to the exchange; (2) errors in trade recordation by brokers and traders and transcription by clerks; (3) errors in the manual recordation of time of execution (audit trail time); (4) the elapsed time associated with entering trade data into trade processing computers; and (5) potential errors in tracking traders' market positions and the values thereof.